Retainer Pricing: How to Turn Project Work Into Monthly Income
A retainer is an agreement where a client pays a fixed amount every month for access to your time or a defined set of work. For you it smooths irregular income. For the client it gives priority and predictability. This guide shows a simple way to price one.
Start with your rate
Take your minimum rate from the hourly rate calculator. Suppose it is $85 an hour.
The pricing formula
Retainer = included hours × rate × (1 − stability discount)
A modest discount, often 0 to 15 percent, is common because you get guaranteed income and less selling time. Do not discount below your minimum rate; the stability is the reason for the discount, not a reason to work for less than your costs.
Worked example
| Item | Value |
|---|---|
| Included hours per month | 10 |
| Standard rate | $85 |
| Stability discount | 10% |
| Monthly retainer | 10 × $85 × 0.90 = $765 |
| Effective rate | $76.50 per hour |
Check that $76.50 is still above your minimum. If your calculator minimum is $86, a 10 percent discount breaks it, so use 0 percent or raise the base rate.
What to define in the agreement
- What is included: tasks, deliverables or hours, and what is out of scope.
- Rollover: do unused hours roll over, or expire? Most freelancers choose expiry.
- Overage rate: what extra hours cost (usually your standard rate).
- Response time: what priority the client gets.
- Billing date and payment terms: invoice in advance at the start of the month where you can; see the invoice checklist.
- Notice period: usually 30 days to end.
- Review: revisit scope and price every three to six months.
Pitfalls
- Scope creep: without hour limits a retainer becomes unlimited work at a fixed price.
- Client concentration: if one retainer is most of your income, losing it hurts. Keep other income streams.
- Underpricing: retainers feel safe, so people undercharge. Use the formula.
Tracking
Track hours against the retainer each month so you can show value and adjust. Invoicing tools with retainer support, such as FreshBooks on its Plus plan (per its published feature list, which we have not tested), can hold the monthly arrangement in one place. See the pricing comparison.